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Here’s Why Brand Power is So Important

Brand power…

This is the idea that some companies have brands that give them huge power in the market.

It’s hard to quantify. But the value is tremendous.

For example, would you rather buy a pair of new shoes from Amazon (AMZN)…

Or a company like Alibaba (BABA) known for its questionable products?

If you’re like most people, you’d go with Amazon, obviously.

Shipping is free…

You can return them if they don’t fit…

And you know they are going to arrive in two days or less.

You also know they won’t be knock-offs.

That’s what I mean by “brand power.”

And this brand power translates into stock price performance

Better Brands Make Better Stocks

For example, take a look at the chart below, which compares the stock price performance of AMZN and BABA since Alibaba came public in late 2014.

Performance Chart of Amazon (AMZN) and Alibaba (BABA) — Source: TradingView

As you can see, shares of AMZN have rallied over 750% since late 2014, while shares of BABA have actually fallen by 16%!

That’s a massive difference…

Now, there are numerous reasons for the huge performance discrepancy.

But I believe that a lot of it has to do with brand power.

The Apple Advantage

Let’s look at another excellent example…

One of the strongest brands I know of is Apple (AAPL).

They make incredible products, as many of you know.

I own an iPhone, an iPad, a MacBook, four Apple TVs, a set of AirPods…

The list goes on.

Why do I buy all of these Apple products?

Brand power!

When the company releases a new product, I know it is going to work.

It is going to sync up with my other devices. The software will be updated on a regular basis.

And although you can get a much more powerful PC for the same price as a Mac…

Many consumers still choose the Mac.

And it shows in the stock price!

Take a look at the chart below comparing the stock price performance of AAPL and the S&P 500 index over the past five years.

Performance Chart of Apple (AAPL) and S&P 500 Index (SPX) — Source: TradingView

Shares of AAPL have rallied over 330% during that time, while the broader S&P 500 index is up just over 75%!

But brand power doesn’t just manifest itself in the stock market.

Here’s another example of Apple’s brand power…

Shopping malls give Apple a special break. The company pays no more than 2% of its sales per square foot in rent, compared with 15% for a typical tenant.

Why?

Because the Apple store brings more shoppers.

Having an Apple store location in a mall increases its foot traffic by 10% for all other stores in the mall.

In other words, everyone wins.

This is a remarkable display of company brand power.

And brand power is also why top-tier, market-leading stocks are usually the best investments.

Embrace the surge,

Ross Givens

Editor, Stock Surge Daily

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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